Cash Transactions for Property Purchases Increase by 50% in Puerto Rico
According to recent statistics shared by the Department of the Treasury at the Convention of the Association of Realtors of Puerto Rico, the number of cash transactions for property purchases has increased by 50% in the last fiscal year. The data shows that in the fiscal year from July 2021 to June 2022, sales transactions totaled $7.5 billion, with approximately 32,131 transactions taking place. The average price of these transactions was $231,698, and 4% of them were cash transactions.
However, for the fiscal year from July 2022 to June 2023, there was a reduction in both total sales and total transactions. Sales amounted to $6 billion, with 23,015 registered transactions. The average value per unit was $214,000. Despite the decrease in overall sales, the percentage of cash sales increased to 8%, representing a 50% change compared to the previous fiscal year.
Melissa Montero, the president of the Association of Realtors of Puerto Rico, stated that the increase in cash transactions cannot be solely attributed to the rise in interest rates. She believes that people find cash transactions easier and more convenient than going through banking procedures. Montero also suggested that this trend may lead to a decrease in the average price of real estate, as some sellers may accept lower prices in exchange for cash sales.
In a separate address, Lisoannette González, the acting secretary of the Department of Consumer Affairs (DACO), highlighted the importance of avoiding illegal practices when selling properties. González reported that since 2016, the department has received a total of 401 complaints related to Law 10, which regulates the real estate business, with 45 of them being received in 2023. She emphasized that deliberately hiding essential property information, withholding deposits, and using received information for personal benefit are inappropriate actions that could result in severe penalties.
González also revealed that the DACO has identified 15 new fraud schemes in the past year, including scams in the real estate sector through social platforms. Describing one example, she mentioned instances where consumers are asked for a deposit to secure a specific property, only to find out later that the property is already occupied. These cases often occur through platforms like Facebook Marketplace, causing distress for both consumers and real estate brokers.
To combat fraudulent practices and provide a reliable resource for consumers, Montero recommended using the Estelar MLS, a specific system used by realtors in Puerto Rico. This database allows accurate and up-to-date information on property status. She also advised consumers to request a broker’s license from anyone claiming to be a broker and to verify their information through the association’s official portal.
While this increase in cash transactions presents both opportunities and challenges for the real estate industry in Puerto Rico, it is crucial for all stakeholders to remain vigilant, adhere to proper practices, and protect consumers from fraudulent activities.